Binance Faces Lawsuit Alleging Hamas Funding Ahead Of October 7 Attack
A new federal lawsuit in the U.S. accuses Binance, the world’s largest cryptocurrency exchange, and its founder Changpeng Zhao of enabling transactions linked to Hamas and other designated terrorist organisations in the years leading up to the October 7, 2023, attacks in Israel.
The suit, filed in North Dakota by more than 300 American victims and family members, claims Binance “knowingly facilitated” the transfer of millions of dollars for groups including Hamas, Hezbollah, the Palestinian Islamic Jihad, and Iran’s Revolutionary Guard Corps.
Families Claim Binance Allowed Covert Transfers
The plaintiffs allege that Binance deliberately failed to monitor incoming funds, creating a pathway for terrorist organisations to circulate money through the platform.
Lawyers for the victims stated,
“Binance ensured that terrorists and other criminals could deposit and shuffle enormous sums on the exchange with impunity.”
According to the complaint, Binance allegedly facilitated over $50 million in transactions to accounts tied to these groups, far exceeding the previously cited $2,000 in Hamas-linked transfers noted by U.S. authorities in 2023.
Investigators traced activity to accounts operating from locations including Gaza, Lebanon, Venezuela, and even North Dakota.
The filing suggests that Binance users under sanctions or seizure orders were able to move funds between internal accounts, undermining attempts at enforcement.
Allegations Of Systematic Evasion
The 284-page complaint details how Binance allegedly structured its operations—including using offshore entities, omnibus wallets, and weak customer verification—to obscure transactions and make it difficult to identify accounts linked to Foreign Terrorist Organisations (FTOs).
Some of these practices reportedly continued even after Binance’s November 2023 settlement with U.S. authorities, in which the exchange admitted to anti-money laundering and sanctions violations and agreed to pay $4.3 billion in fines.
Zhao’s Legal History Adds Context
Changpeng Zhao pleaded guilty in 2023 to violating the Bank Secrecy Act and causing a financial institution to do the same.
He served four months in federal prison and was pardoned by former President Donald Trump last month.
As part of the settlement, Zhao resigned as CEO of Binance.
Binance’s spokesperson told the Financial Times that the exchange complies fully with “internationally recognised sanctions laws, consistent with other financial institutions,” adding that the heads of the U.S. Treasury’s FinCEN and OFAC have stated cryptocurrency is not widely used by Hamas terrorists.
The company said it hopes “for lasting peace in the region.”
How Could Binance Transactions Go Undetected
The complaint argues that Binance’s lax controls allowed large volumes of sanctioned money to move undetected, painting a picture of a platform functioning as an unregulated financial channel for designated organisations despite repeated warnings and prior enforcement actions.
Plaintiffs contend that the exchange enabled more than $1 billion in transfers to wallets tied to FTOs, a sum that dwarfs the amounts previously cited by regulators.
Multiple Legal Challenges Intensify Pressure
This case adds to a series of U.S. lawsuits targeting Binance over similar allegations of facilitating crypto transactions connected to terrorism.
The North Dakota filing is notable for directly tying Binance’s alleged actions to the financing of the October 7 attacks, marking one of the most aggressive legal challenges yet against a major cryptocurrency platform over national security concerns.
The complaint highlights growing questions about the ability of crypto exchanges to monitor cross-border transactions as geopolitical risks increase, and whether existing regulatory frameworks are sufficient to prevent misuse by sanctioned organisations.
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